(Bloomberg) -- Egypt raised prices for a wide range of fuel products by up to 15%, the latest trimming of state subsidies following a new pact with the International Monetary Fund.
Rates of gasoline, diesel, kerosene and a type of fuel oil were all raised, with the exception of fuel oil used for electricity and food related industries, the oil ministry of the Middle East’s most populous country said in a statement. A pricing committee meets quarterly to determine prices at Egypt’s pumps.
Egypt is recalibrating its economy after securing a global bailout of some $57 billion led by the IMF and United Arab Emirates that’s giving a way out of its worst economic crisis in decades. The IMF, which more than doubled the value of its program to $8 billion, said in March that “it remains essential to replace untargeted fuel subsidies with targeted social spending as part of a sustained fuel price adjustment package.”
Washington-based IMF and Egypt are due to hold a meeting for a third review of the loan program on July 29. The IMF board’s nod would unlock a tranche of about $820 million for Egypt.
Effective today, diesel will rise to 11.5 Egyptian pounds ($0.24) per liter from 10. The prices of 95, 92 and 80-octane types of gasoline used by most cars, increased to 15, 13.75 and 12.25 pounds per liter from 13.5, 12.5 and 11 pounds, respectively.
Still, they remain some of the lowest in the world, although more expensive than in Iran and Libya.
The hikes, which will see millions of Egyptians paying more, come after authorities raised the price of subsidized bread for the first time in decades. That move didn’t stop headline inflation slowing for a fourth month in June.
The inflationary impact of a gradual phasing-out of fuel-product subsidies and a possible rise in power tariffs this summer “is likely to be relatively small,” EFG Hermes said in a June 6 note. It predicts the deceleration in consumer prices will continue for the rest of the year.
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